Standard & Poor's Ratings Services said it raised its underlying rating for credit program on Brighton Area Schools, Mich.'s limited-tax general obligation debt to BBB-plus from BBB.
The outlook is stable.
"The upgrade is based on the district's continued enrollment growth, which improved its financial position at the end of fiscal 2014 and eliminated structural imbalances," said Standard & Poor's credit analyst Errol Arne. "Also, we expect that the district will achieve large operating surpluses in fiscal years 2015 and 2016, thus returning to positive reserve position."
The district's limited-tax GO pledge secures the bonds.
The district's financial position is improving due to the continued increases in enrollment over the past three years. The district's enrollment in the past three years increased 6% annually to 7,455 in fiscal 2015.
Management attributes the growth to newly added programs, which provide noncore educational services targeted to nonpublic students within the district's boundaries.
Management indicates enrollment growth will continue but at a slower pace in the coming years with a further increase of about 300 in 2016, which is a positive credit factor as enrollment is directly tied to state funding for Michigan school districts.
